UK's financial watchdog calls out Kim Kardashian's ad on cryptocurrency by unknown maker

The United Kingdom's financial watchdog and regulator stated that celebrities and influencers such as Kim Kardashian are emerging as a threat to retail investors by pushing doubtful crypto tokens. In a speech on risks of 'speculative' cryptocurrency tokens, the chairperson of the UK's Financial Conduct Authority (FCA), Charles Randall singled out an Instagram post by the billionaire Kardashian, which promoted Ethereum Max. He said the post, which was flagged as an advertisement, "Might have been financial promotion with the single biggest audience reach in history".

The chair of the UK's financial watchdog warned the audience of the risks of purchasing crypto assets based on promotions by social media influencers. Randall stated that people with little or no knowledge are buying digital currencies for fear of missing out. In a warning targeting the 'young' investors, Randall cautioned against the 'hype' of cryptocurrencies, particularly the new ones back by celebrities and no veteran in the field, which might be outrightly 'fake'. 

Randall also said that about 2.3 million Britons currently held the cryptocurrency, wherein 14% of them use credit cards to purchase them, 'thereby increasing the exposure to loss'. He said that FCA has repeatedly warned against the risks of holding 'speculative tokens'. Notably, digital currencies are not regulated by any government-led body or even covered under any compensation schemes in the UK or elsewhere. 

UK's Financial Conduct Authority calls out Kim Kardashian's crypto post

During his speech, Randall cited the US-based celebrity with 228 million Instagram followers, who earlier this year was condemned for posting a paid promotion of a cryptocurrency token called Ethereum Max, where she asked her followers, "Are you guys into crypto". While the post was marked as an advertisement, Randall said Kardashian did not reveal that the said digital token was formulated only a month earlier by unknown developers. 

"Of course, I cannot say whether this particular token is a scam," Randall said. "But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all."

Furthermore, he called for greater powers to keep a check on cryptocurrency advertisements and their online promotion. To combat the flood of 'problematic content' the UK FCA's chairperson said it was difficult for regulators to stand by while consumers and 'vulnerable' people were putting their financial futures in jeopardy.

(Image Credits: Kim Kardashian's Instagram)